What is an Appraisal

Appraisers are licensed or certified professionals who provide a qualified opinion of value. All states require appraisers to be licensed or certified to provide appraisals to federally regulated lenders. Meaning, you’re working with a highly trained individual who understands current real estate market conditions in your area.

Appraisers are considered third-party participants in the transaction. Their work assures mortgage lenders that the amount they are lending does not exceed the home’s true value. Yet, it also assures that you (as the home buyer or homeowner) are receiving a fair, unbiased price for your property.

What does a home appraiser look for?

The appraiser researches recently sold properties in your area with features similar to your prospective home, called “comparables.” Comps are sales records of recently sold homes. Appraisers and real estate agents use at least three, usually through the Multiple Listings Service (MLS), to get the most accurate estimate possible of a home’s value. The three comps must be sales that have closed within six months of your appraisal date to be considered accurate.

Expect your assigned appraiser to use the designated forms written and approved by the FHA, Fannie Mae, etc. These forms ask specific questions about neighborhood demographics, housing trends, utilities, home measurements, site characteristics, property condition, general improvements, and at least one approach to value.

More specifically, you can expect the following factors to be reviewed:

  • The condition of the home (are there any cracks, damages, leaks, etc.)

  • The size of the home and the property lot

  • The quality of landscaping

  • The quality of roofing and foundation

  • The number of bedrooms and bathrooms

  • The quality of lighting and plumbing

  • The number of fireplaces

  • The condition of a swimming pool or sprinkler system

  • The quality of the basement (whether it’s finished or unfinished)

  • The finishing details in the home (such as granite countertops, hardwood floors, and appliances)

A home appraisal is not the same as a home inspection. Learn about the differences and the importance of home inspections.

How long does an appraisal take?

Home buyers or borrowers looking to refinance: you can expect an appraiser to be at your home from 20 minutes to two hours, depending on the size of the property. They’ll use that time to take photos of all living areas which will document the condition of the home.

Once the physical appraisal is complete, the appraiser creates a written report of findings for the mortgage lender. This generally takes three to five days. The appraiser must confirm all data, so this takes some time.

How to prepare

Maximize your home value ahead of time, so your home appraises as high as it can. This may include significant work such as home renovations, or simple tasks like the ones listed in the checklists below:

Appraisal checklist for buying a home

  1. Review neighborhood home values and recent sales

  2. Assess your desired home’s condition so you can plan ahead for necessary repairs

  3. Include an appraisal contingency so your offer can be withdrawn if the appraisal comes up short


Appraisal checklist for selling or refinancing a home

  1. Ensure your landscaping is on point as“curb appeal” is considered during an appraisal

  2. Repairing damaged drywall or painting rooms can factor into your valuation

  3. Make sure every light switch, wall outlet, fan or vent works

  4. Document recent home improvements with estimated prices and dates

  5. Provide copies of previous appraisals

  6. Make sure all rooms of the house are accessible

  7. Be flexible and coordinate the appointment around the appraiser’s schedule

  8. Let the appraiser do the inspection without distraction

Tip: if you have an FHA loan and are doing a streamline refinance, typically an appraisal isn’t needed.


Be aware of the $500 rule


Appraisers tend to value property in $500 increments – like $300,000, $300,500, $301,000, etc. Because appraisals with $500 increments are common, it’s in your best interest to make small repairs if you are selling your home or refinancing. Even the smallest of changes can contribute to the overall condition of your property.

Appraisals in Colorado are around $600-900.  Depending on if it is VA, Conventional or FHA.  IT is typically required with most home loans.  In some cases it may not be.  But most of the time it is. 

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